Airfares have returned to normal levels, with June 2023 prices reported to be 18.9% lower than those in June 2022, according to data from the U.S. Bureau of Labor Statistics (BLS). Despite this decrease, many travelers still perceive flight costs as high.
The reduction in airfares can be attributed to several factors, including the normalization of travel demand and high jet fuel costs which led to record-high airfares last summer. In fact, June 2023 airfares are 1.33% lower than those in 2019, and they’re cheaper still compared to a decade ago.
Despite the downward trend in airfare prices since 2014, there were sharp increases due to the pandemic. In June 2020, airfares were 27% lower than in June 2019 due to the sharp decrease in travel demand. However, as travel demand returned, so did higher prices. Airfares rose 25% from June 2020 to June 2021, and increased a further 34% from June 2021 to June 2022. Yet, the long-term view shows that airfares in June 2022 were only 0.4% higher than in 2014.
So why do airfares still feel so high? There could be several reasons. For one, airfare prices don’t necessarily decrease for all routes. For instance, data from travel booking app Hopper shows that airfares to Europe this summer are the highest they’ve been in the past six years. This could be due to people who typically book domestic flights opting for more extravagant trips abroad. Furthermore, the recent major flight cancellations may have led travelers to choose more expensive direct flights to avoid potential disruptions.
Other factors that could contribute to the perception of high airfares include recency bias, shorter booking windows, and unbundling. Recency bias refers to people comparing current prices to those of their most recent trips, which were likely during peak travel periods. Shorter booking windows mean people are booking closer to their departure dates, which typically results in higher fares. Lastly, unbundling refers to airlines offering low base fares but charging additional fees for extra services, which can make the overall cost feel higher.
It’s important for travelers to understand these factors to be able to plan and budget their trips effectively. Ultimately, despite the perceived high costs, air travel is still a relatively affordable option for many, especially when booked in advance and outside of peak travel periods.